Presentation on theme: "Chain Discounts chain discount: series of discounts or when more than one discount is given – a discount on an already discounted price Another discount."— Presentation transcript:
1Chain Discountschain discount: series of discounts or when more than one discount is given – a discount on an already discounted priceAnother discount that can happen is that of a chain discount. A chain discount is where there is more than one discount that will be used on one product.A supplier may offer chain discounts to sell out a discontinued item or to encourage you to place a larger order.A chain discount is a series of discounts.
2For chain: 35% less 20% less 15% or 35/20/15 Does this mean 70% off?no35% discount is deducted from the retail price to yield first net priceThen, 20% is deducted from first net price to yield second net priceThen 15% is deducted from the second net price to yield final net priceAn example of a chain discount would be where a business has taken a product and already discounted 35% off and you discount an additional 20% off and you offer a 15% coupon to customers to increase sales.This does not mean 35% + 20% + 15% off.35% discount is deducted from the list (retail) price to yield first net price.20% of first net price is deducted from first net price to yield second net price.15% of second net price is deducted from second net price to yield final net price.
3For Example Retail price is $400. Chain discount is 30% less 25%. Find the first net priceDollar Discount = X =First Net Price = =Final net priceFinal Net Price = =List price is $400. Chain discount is 30% less 25%.Find the first net price.Paid Percent of 30% = 70%400 * .70 = 280Find the final net price.Paid Percent of 25% = 75%280 * .75 = 210
4Make it simple Chain Shortcut Formula Retail Price x (1 – 1st discount) x (1 – 2nd discount)Example List Price of $200. Chain discount is 15% less 25%Net Price: x X =$200 x (1-.15) x (1-.25)$200 x (.85) x (.75)Answer = $127.50
5Putting it togetherThe Green Lawn Corporation produces a lawn mower, which is priced at $695. A new model is ready for production, so the old model is to be discontinued. Green Lawn is offering a chain discount of 20% then 10% (20/10). What is the final net price of the old lawn mower?Answer to exampleFirst Net Price695 * .80 = 556Final Net Price556 * .90 = $500.40
6Example:You get a coupon in the mail for 40% off of a pair of shoes that are already 25% off. The shoes are $50. What would your final cost for the Shoes be?Net Price: x X =
7Try: $895 with 20/10/35 discountNet Price: x X X =
8Figure this…The football stadium sold a total of 15,500 tickets, of those tickets 25% were sold to women. Of the tickets sold to women, 50% of them were sold at a discounted price. How many women purchased discounted tickets?Remember to round up to the nearest whole number15,500 x .25 = 38753875 x .50 = 1938